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Nightly Business Report

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Russia 18, Ukraine 18, U.s. 11, Warren 4, Phil 3, Tyler Mathisen 3, Andres 3, The Nation 2, Phil Lebeau 2, United States 2, Us 2, Jim Cramer 1, Steve Liesman 1, Becky 1, Pepsi 1, Stephanie 1, Steve Sedwick 1, Steve Sedgwick 1, Susie Gharib 1, Coca-cola 1,
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  PBS    Nightly Business Report  

    March 3, 2014
    6:30 - 7:00pm PST  

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this is "nightly business report" with tyler mathisen and susie gharib brought to you in part by. >> thestreet.com. featuring stephanie link who shares her investment strategy, stock picks and market insights with actions alerts plus. the multi million dollar profollow owe she manages with jim cramer. >> investors on edge, and they are selling stocks as the conflict with ukraine and russia escalates. is there anything the u.s. can do? >> warren buffet speaks. what does the world's famous investor think? we talk to him about that, the economy and more. >> winter storms kept car shoppers at home for the second straight month. will deal es offer big incentives to get would be
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buyers back in the showroom? that and more tonight on "nightly business report" for monday, march 3rd. good evening everyone, alongside susie gharib i'm tyler mathisen. stocks sold off as jittery investors reacted sharply to the conflict between russia and ukraine. all three major indexes had the worst one-day slides in a month taking a queue. the buildup over the weekend sparked a stern condemnation from the white house. >> what cannot be done is for russia with impunity to put its soldiers on the ground and violate basic principals that are recognized around the world, and i think the strong condemnation that's received from countries around the world indicates the degree to which russia is on the wrong side of
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history. >> as russia tightened the grip, it was risk off in the equity markets with russia's tumbling 12% and russia's central bank was forced to hike interest rates to keep the value from plunging even more. volatility spiked at exchanges around the globe as investors pulled money out of higher risk stocks and switched cash into safer physical commodities. the price of gold hit a four-month high. crude oil shot up more than $2 a barrel ending shy of $105. the dow was down as much as 250 points early in the session but battled back and ended just, just 15 three points lower. the nasdaq lost 30 and s&p 500 which reached an all-time closing high was down 13. the threat of military action heats up. officials in ukraine's capitol try to find a solution to the stand off and to look for immediate relief for the growing
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financial crisis. steve sedwick has more. >> reporter: here, the prowestern government reiterated its support for a peaceful solution to the crisis which is seen russian military on passion. i spoke to the prime minister of the ukraine today who said to me he was willing to rebase the relationship with russia on the basis there was no more military action and broader ukraine territory. it's a financial crisis and indeed, the minister admitted the country was down to the last $15 billion of international foreign exchange reserves, but he remained hopeful with due to begin negotiations on tuesday that a deal could be reached in four to five days. for "nightly business report", this is steve sedgwick in kiev.
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suffering the move into ukraine, the threat of economic sanctions from the u.s. and perhaps other nations, as well, could have a more serious impact on moscow. steve liesman looks at what the u.s. and allies may have against russia. >> reporter: the u.s. has little economic pull to force russia but some experts think it may not need it. the early conclusion is the fall of the prorussian government made vladimir putin look weak and invaded criticism and to have a card in the future course of ukraine, but ultimately, experts say occupying any part of ukraine is at adds with putin's best interest and the best the west can do is help him figure that out. russian analyst tom gram says russia for many decades has wanted a u cane that's not in weste western orbit and toured the
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west and creates a volatile country on the doorstep. the u.s. and western strategy is two-fold. one, it's to put some pressures around the edges on russia commercially and diplomatically kick them out of the ga. then you come in with an ihf program and with direct support to enable the ukrainian government to solidify it self- >> reporter: a senior administration official added the other part of the strategy is to offer a way out of every junk tour, there is an off ramp if they choose to deescalate. the best response could be a united western political front that agrees to national elections for president and parliament. if there is escalation, it could come in the form of trade sanctions and military aid to u crane but banking restrictions would take a long time to work. so options are limited and a
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potentially limited effect. the hope is that russia decides on its own. >> sddespite the political turml in ukraine, he says it will not weigh on the stock market here. andres, nice to have you with us. why aren't you worried and are you confident enough to tell and advice investors to buy on the dips? >> the first thing i would say is short-term i am worried. this situation is very fluid and could escalate before it deescalates. if you're a long-term investor, if you're not trying to invest for the next week but trying to invest for the next three years, five years, we don't think the issues in ukraine are system.
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based on that assumption, we think the u.s. equity will be fine in the long term. the short term, sure there is a risk off environment that may see more volatility. >> i assume, andres, russia is included and the stock market was down 12% or so today. if you're in a general emerging markets fund, you're going to feel it, aren't you? >> absolutely. i think short term you'll see -- you'll take a hit there and in the next couple weeks. having said that, this is also going to create opportunities for long-term investors because not all these countries put in the emerging market index are the same. for instance, indiana is in the emerging market index is one of the countries that i favor at this point over the next two or three years, yet, it was down 1.5%. doesn't have a lot to do with ukraine or russia, the economy doesn't. it was down. so it should create opportunities. you need to differentiate between the ri
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opportunity. >> what kind of investm changes should investors make? emerging markets, we just talked about that. investors have stock in big u.s. multi nationals that have a lot of trade with europe, which would be impacted by this ukrainian situation. so what kind of investment move should investors make in their port tofolio portfolios? >> they should not change based on the ukraine situation, right? if you sell now, two tough decisions, when do i have to reenter the market. for long-term investors, staying invested is the best avenue to go. obviously, you need act of management, people that understand what is happening on the grounds and make those decisions, but when it comes to the long-term investment, if you try to retire one day, the situation in ukraine should not change the overall portfolio. >> talk to me about commodities, gold up today, oil higher, net gas on a roller costar. what is next? >> yeah, one thing to note
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because a lot of people are concerned about natural gas specifically. if you think about ukraine matters so much to europe is for them to get natural gas. the good news here is that europe, unlike the united states had a mild winter. they have a ton of inventory, more than 20% they do by this point. so natural gas in the short term could see a spike but europe should be okay and as you know here in the united states, we have a lot of natural gas we're producing that we might end up exporting to europe at one point if russia continues to escalate this situation in ukraine. >> so andres, you heard our report from steve leastman, what if something like that happens, what advice do you give investors? >> this could get worse before better. very fluid situation. i can't really predict what the
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next 24, 48 hours will give you. at the end of the day if you think about the next two or three years, this really shouldn't change the picture, right? something mentioned earlier that i think is key. the pressure on russia could come from the markets. just to put this into prospe perspecti perspective, it was mentioned russia equities are down 10%. that is more money that russia spent in the oclympicsolympics,? this will put pressure on putin, maybe not the u.s. but the markets at times put pressure on these situations, as well. >> fascinating discussion. thank you so much. he's global market strategist at jp morgan funds. still ahead, when stocks sale off, what does warren buffet do? answer and his take on everything from the economy to stock market straight ahead.
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americans made more money in january despite the hash weather, we spent even for of it. personal income rose 3/10s of 1% but spending was up by 4/10ths while spending in december which included the heart of the holiday shopping period was revised lower. factory activity rebounded from an eight-month low as new orders bounced back. warren buffet, the nation's best known investor famously said investors should be fearful when others are greedy when others are fearful.
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how does the or kill see the market right now, especially with tensions in ukraine making many investors fearful? becky quick speaks with him on that and first, the u.s. economy. >> we've had this moderate but consistent growth now for four and a half years and every now and then we get excited about a speeding up, and every now and then we worry about a double dip. we haven't gotten wildly optimistic and pessimistic but over that period, its small waves of optimism and that. >> you laid out the terms of your will, what you set aside for your wife. >> i laid out what an average person, not the expert on stocks will do. my widow will not be an expert on stocks and i want to be sure
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she gets a descent result. she doesn't need to get a sensational result. since my brooke shire sells go to somewhere else, part of it goes out right, part goes to a trustee. put 90% in an, 10% and the market and you take it out of that and instead of selling stocks at the wrong time. she'll do fine. anybody will do fine with that. it's low cost. it's in a bunch of wonderful businesses, and that takes care of itself. >> you specifically set a van guard index. >> yeah, well, it's a very, very low-cost index fund. >> in the letter to shareholders, you do layout something on the horizon that you are concerned about, and that's what is happening with pension funds, the promises
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made. >> the government pensions aren't the problem. the private are. the government has the power to tax, and it has the power to print money. we are not in a dangerous u.s. fiscal situation. we -- at some -- we have to quit having our debt grow as a percentage of gdp. it made sense to have it happen during -- when things were terrible five years ago, but we can have a deficit, which creates more debt but not at a rate that grows faster than gdp grows. the trend is wrong. there is a danger if that goes on, although a lot of countries have gone far beyond. i don't like to see it go up as a percentage. this country is in wounderful shape. >> finally, looking at the stock market today, there are people nervous about what happens with the situation in ukraine. you would tell them? >> i would tell them it doesn't change anything. if you have a wonderful business
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of your own in illinois, why would you sell it today because of what is happening in the ukraine? if you have a farm producing, an apartment house that's fully occupied, why would you sell it today because of the ukraine? that's the same if you have a piece of a wonderful business or pieces of many wonderful businesses. people react to short-term things and react quite ra rationally. >> he checked out the price of a stock he had been buying in london last friday, if prices drop like we've been seeing, he says he'll just buy more. for "nightly business report", i'm becky quick. when it comes to specific companies, buffet said coca-cola is facing more head winds and doesn't think pepsi should split up and feels fine with ib m's
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ceo and likes the buybacks. we begin tonight's market focus, the parent of remember lobster and oliver garden estimated a profit that fell short of expectations and said its plan to spin off red lob store is still on tract with investment firms that urged darden to take other actions. shares plunged today. pfizer is opening to sell an over the counter version of lipator. it started to test to see if it's safe to take it without doctor guidance. if approved by the fda, this would be the first stanton without a prescription. shares of dendrion will launch the cancer vaccine. it will be available in the uk
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and germany. a release date has not been set, unless that helped offset expectations. investors sold shares of citi today over the bank's compliance with anti-money laundering and bank secrecy laws. the city received subpoenas a few days after the mexican banking unit was defrauded from as much as $400 million. shares closed at 47.61. microsoft shares fell on news of changes in top management. new ceo nedella is a former clinton family aid and microsoft executive vice president overseeing advertising and strategy. two others will also leave the software company. shares were down more than 1% to $37.78.
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mens warehouse and jos. a. bank are closer to a possible merger. the two agreed to exchange confidential information to work toward evaluating a combination. men's warehouse said it received a draft merger agreement. shares of both companies rose slightly today. men's warehouse closed at $54.10 and jos. a. bank at $62.30. fedex will increase rates by 4% at the end of the march. last month fedex increased the domestic shipping rates. it comes as cheaper shipping services come. shares rose a fraction to 1 33.38. an update on the story on the frigid weather. we brought you this story recently. the great lakes are now more than 90% covered in ice, that's the most ice cover in 34 years. i'm cold just looking at it. with a massive arctic front over
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the next few days, they predict the ice cover will set a new record this week topping 95% and the potential economic impact could be enormous as 20,000 tons of cargo including cole, fuel and more need to get through. >> speaking of the cold weather, coming up, how much did the bitter cold stall sales of new cars last month and what might happen when the temperatures warm up? apple is driving a brand-new product.
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the automobile system called car play will make its debut this week in new vehicles from ferreri, mercedes, you can access maps, listen to music and respond to text messages at the push of a button located on the steering wheel. >> no matter how many of those high-tech gadgets there are boosting new car sales, there were no match for the bitter cold weather and pounding snowstorms that kept a lot of would be buyers at home last month. the nation's two biggest makers gm and ford saw declines in february. sales of chrysler surged 11% on big sales of jeeps and dodge ram pickups. phil lebeau joins us with more on who won, lost and if auto makers expect business to pick up when the weather turns better. phil, let me start weather. is it really the weather that caused these sale declines or
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something else going on? >> no no, i think it is the weather, suzy. when you talk with dealers, and inumber, they aren't seeing the traffic especially on the cold and snowy days. when the weather improves and on those days when it did improve, they saw traffic come back and that gives them confidence at the end of the day, the buyer wants to come in and buy once they have the confidence to get out into the weather, and let's be honest, i haven't wanted to go out a lot here in chicago and i'm sure you haven't in new york, either. >> absolutely not, phil. are inventories backing up, and will that maybe there will be big deals when people go out again? >> we're already starting to see better deals in particular segments, pickup trucks is a good example. actually, up inventory levels for some of the most popular came down in the month of february. still looking at larger than usual inventories and i suspect tyler, as we go through the month of march, if those inventories remain where they are, we'll see more deals.
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>> how is march shaping up, phil, and who will win and lose? i heard somebody saying i'm going to buy an suv because after these snowstorms, you really want a car that has traction and works well in the snow. >> right, susie, pickups and suvs have been popular and kpi spect that to continue in march. look, all of the auto makers are banking on warmer weather bringing people into the showroom and if that happens, they expect a big surge in march, april and may. keep in mind, we said the same thing at the beginning of february, if there was better weather, we would see better sales. it hasn't started well. let's see what happens over the next three to four weeks. >> phil lebeau reporting for us tonight. finally tonight, forbes magazine is out with its annual list of the world's billionaires and there are more of them than ever before. more than 1600 along with the most women ever on the list, 172 female billionaires. for the richest of the rich in
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third place, the spanish clothing retailer ortaga known for the zara fashion chain worth $64 billion. in second place after four straight years on top, the mexican telecom carlos slim and his family worth 7 2 and on first place, american guy, harvard drop out bill gates. he topped the list for 15 of the past 25 years. warren buffet, fourth place, he's got more than $58 billion. >> $58 billion. >> i could live with that. >> what i found interesting on the list, you mentioned a lot of women and a lot of billionaires are under 40, many of them are techs and most of the billionaires, about 500 of them are from the u.s. >> and the other thing, how many of the walton family are on that list one way or another? the walmart fortune really
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moves. >> thanks to sam walton. that's "nightly business report." we want to you mind you this is the time of year your public television station seeks your support and it makes shows like "nightly business report" possible. >> i'm tyler mathisen. on behalf of your public television straight, thanks for your support. "nightly business report" has been brought to you in part by. >> thestreet.com, founded by game cramer, thestreet.com is an independent source for stock market analysis. it's home to his multi million dollar portfolio. you can learn more thestreet.com/nbr.
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